Prepare a pro forma cash flow forecast with 0.50 per year dividend by completing the following table. Fuyao Glass Pro Forma Cash Flow Forecast 2015 2018 2016 2017 (millions of ) Cash flows from operating activities Cash generated from operations Income tax paid Net cash generated from or (used in) operating activities Cash flow from investing activities Capital expenditures - Russia Capital expenditures -Others including China Working capital investment Net cash generated from or (used in) investing activities Net cash available before financing (4,335.50) (1,121.57) (949.42) (1,242.42) Cash flow from financing activities Borrowings or (Repayments) Dividends paid to the company's shareholders Other interest received Capital injections - issuance of new shares Net cash generated from or (used in) financing activities 227.00 5.00 61.00 13.00 Net (decrease) or increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period Notes: 1. Cash generated from operations and revenue increase at a constant rate of 10 per cent per year from 2014 to 2018. 2. Income tax paid is 12 per cent of cash generated from operations from 2015 to 2018. 4. Planned capital expenditures for Others including China remains the same amount from 2016 to 2018. 5. Working capital investment increases at a rate of 163 per cent of the change in cash generated from operating activities until 2018. c. Cash Flow Statement millions of 2013 2012 2014 Cash flow from operating activities Cash generated from operations Income tax paid Net cash generated from operating activities 2.772 (346) 2,426 3,199 (382) 2,817 3,565 (435) 3,131 40 311 75 (1,507) (1,881) (2,793) Cash flow from investing activities Proceeds from disposal of PP&E (including leases) Purchases of PP&E (including leases and intellectual property Interest received | Government grants received relating to PP&E Net cash used in investing activities 14 83 (1,383)| 151 (1,417)| 93 (2,612) Cash flows from financing activities Borrowings and repayments Dividends paid to the company's shareholders Interest paid Capital Injections Net cash used in financing activities (380) (801) (197) 14 (1,364)| (186) (1,001) (209) 741 (1,001) (254) 0 (1,396) | (511) Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period (320) 808 487 5 487 492 7 492 499 EXHIBIT 3: CONSOLIDATED FINANCIAL STATEMENTS a. Balance Sheet millions of 2012 2013 2014 ASSETS Non-current assets Property, plant, and equipment Leasehold land and land use rights Intangible assets Investments in joint ventures Long-term receivables Long-term prepaid rental expenses Deferred income tax assets 8,0958 ,671 10,26 | 7,142 7,416 | 8,823 523 780875 244757 104 g 25 9 67 56 113153 130 62 B9 Current assets Inventories Trade and other receivables Derivative financial instruments Restricted cash Cash and cash equivalents Assets of disposal group classified as held-for-sale Total assets 5,0656,012 6,630 1,907 1,8772,169 2,647 3,2453 ,549 0 24 a7 490 499 417 402 13,160 14,683 16,89 | EQUITY Equity attributable to equity holders of the company Share capital* Share premium Other reserves Retained earnings Non-controlling interests Total equity 6,988 7,858 8,814 2,003 2.003 2,003 | 34 A4 184 854 874 3,9474,7275,753 | 4 6,992 1 7,862 8,818 | 4 LIABILITIES Non-current liabilities Borrowings Deferred income tax liabilities Deferred income on government grants .009 B80 g 121 1,244 9 18 63 260 1,622 1,213 74 336 5,160 5,581 1,825 2374 206 259 3,1262.899 6,451 2,795 282 3,336 Current liabilities Trade and other payables Current income tax liabilities Borrowings Derivative financial instruments Current portion of deferred income on government grants Liabilities of disposal group classified as held-for-sale Total liabilities Total equity and liabilities 3 7 1 4 32 22 6, 1696,8228,073 13,160 14,683 16,897 | EXHIBIT 3 (CONTINUED) b. Income Statement millions of Revenue Cost of sales Gross profit Distribution costs and selling expenses Administrative expenses Research and development expenses Other income Other (losses gains -net Operating profit Finance income Finance costs Finance costs-net Share of results of joint ventures 10,247 (6,420) 3,828 (779) (763) (236) 63 (48) 2,065 11,501 (6,831) 4,671 (877) (908) (389) 54 2014 12,928 (7,566) 5.363 (982) (1,031) (518) 46 (43) 2,834 2,552 2 1241 (226) (224) 22 (202) (199) 26 (227) 31 Profit before income tax Income tax expense Profit for the year L 1,862 | (338) 1,524 2,379 (462) 1.917 2,638 (422) 2,217 Earnings per share for profit attributable to equity holders of the company during the year Basic and diluted earnings per share (expressed in per share) Dividends proposed 0.76 1,001 0.96 1,001 1.11 n.a. EXHIBIT 4: FINANCIAL PERFORMANCE MEASURES 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 9,689 2,911 12,928 2,217 10,247 1,525 5,717 246 1,513 392 11,501 1,917 14,683 40.61 8,508 1,788 10,567 40.42 6,079 1,118 9,051 42.05 5,166 917 9,462 36.18 3,935 614 7,594 34.76 16,891 13,160 12,212 9,333 41.48 37.35 36.56 31.32 30.51 16.66 4.30 13.46 a. Fuyao Glass Historical Performance Revenue (millions of ) Net Income | (millions of ) Total Assets (millions of ) Gross Margin Percentage (%) Net Income Margin Percentage (%) Dividend Payout Ratio Dividend Yield Ratio Return on Assets (%) Return on Equity (%) Sustainable Growth Rate (%) Current Ratio Debt Ratio Capitalization Ratio 0.52 17.15 n.a. na. 13.12 14.88 0.66 0.06 11.58 21.86 15.61 0.53 0.05 0.06 21.01 0.64 0.04 16.92 30.60 18.39| 0.30 0.01 12.35 25.49 0.00 2.64 17.76 15.60 0.54 0.51 0.02 0.01 9.69 18.08 26.01 21.07 0.00 5.98 12.39 13.05 24.38 25.14 24.27 7.53 17.73 n.a. 11.70 7.43 11.41 11.01 17.84 7.53 11.96 10.32 17.73 L 1.03 0.48 0.34 1.08 0.46 0.33 0.98 0.47 0.36 1.04 0.49 na 1.00 0.45 na 0.99 0.52 na 0.78 0.65 na 0.88 0.63 na 0.94 0.62 na 0.92 0.66 na. NSG Gobain b. Competitive Performance Revenue (millions of ) Net Income (millions of ) Total Assets (millions of ) Gross Margin (%) Net Income Margin (%) Dividend Payout Ratio Dividend Yield Ratio Return on Assets (%) Return on Equity (%) Sustainable Growth Rate (%) Current Ratio Debt Ratio Capitalization Ratio Fuyao 12,928 2,217 16,891 41.48 17.15 n.a. n.a. 13.12 25.14 n.a. 1.03 0.48 0.34 For Year Ended December 31, 2014 Saint- AGC Xinyi 67,415 30,305 279,167 18,689 1,024 (824) 6,480 1,092 103,867 46,259 3 04,667 16,827 24.61 24.13 6 .81 25.17 1.52 (0.03) 2.32 12.57 1.31 0.00 0.73 0.43 0.037 0.00 0.03 0.01 0.991 (1.78) 2.13 6.49 1.73 (9.45) 5.17 8.85 (0.53) (9.45) 1.40 5.04 1.76 1.03 1.35 1.00 0.43 0.81 0.59 0.41 0.33 0.72 0.40 0.33 EXHIBIT 5: PLANNED CAPITAL EXPENDITURES, 2015 AND 2016 Location and Type of Expenditure Year ended December 31, 2015 2016 (millions of \) 760 250 1,010 255 455 710 32 0 1 United States Auto glass Float glass U.S. subtotal Russia Auto glass Float glass Russia subtotal Others Auto glass in Shenyang Auto-glass technology upgrades Float-glass technology upgrades Other Others subtotal Total 470 525 995 32 190 1,400 200 158 200 100 1,300 3,005 1,948 2,990 EXHIBIT 6: BORROWINGS (MILLIONS OF ) As of January Debt Type As of December 31 31 2012 2013 2014 | 2015 Non-Current | Long-term bank borrowings | Medium-term notes | Less: current portion of non- current borrowings Subtotal 617.0 399.5 (136.3) 880.2 924.0 399.5| (406.0) 917.5 1,198.0 399.6 (385.0) 1,212.6 1,198.6 399.7 | (385.0) 1,213.3 2,687.3 311.3 Current | Short-term bank borrowings Short-term commercial papers Current portion of non-current borrowings Subtotal | Total 1,146.4 | 1,260.6 | 2,640.9 1,843,1 1,232.7 309.7 136.3| 406.0 385.0 3,125,8 2,899.3 3,335.6 | 4,006.0 | 3,816.8 4,548.2 385.0 3,383.6 | 4,596.9 | Note: Fuyao's principal banking relationships were with Agricultural Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Bank of China, China Construction Bank, The Export-Import Bank of China, Citibank, and Deutsche Bank. EXHIBIT 7: STOCK PRICES AND DIVIDEND PAYOUTS a. Stock Price Change around Dividend Payment Year Dividen d RMB Event Date 3-Day SSE Return (%) Fuyao minus SSE (%) Fuyao Ending Share Price (W) 8.08 8.59 8.00 3-Day Fuyao Return (%) 1.25 -5.93 0.00 -0.84 1.81 -7.74 2014 0.50 -3.49 3.49 2013 0.50 2012 0.40 Pavout May 19, 2014 Ex-Dividend May 13, 2014 February 25, Announcement 2014 Payout June 7, 2013 Ex-Dividend June 3, 2013 Announcement March 19, 2013 Payout July 6, 2012 Ex-Dividend June 27, 2012 Announcement April 25, 2012 Payout April 8, 2011 Ex-Dividend March 30, 2011 Announcement March 2, 2011 Pavout April 29, 2010 Ex-Dividend April 20, 2010 Announcement | March 10, 2010 8.10 9.00 8.42 7.60 8.40 8.28 12.16 12.95 12.59 11.11 11.82 12.45 -4.86 -8.94 1.66 -0.66 -6.92 2.64 2.13 -8.48 1.50 -2.03 -7.30 0.08 -5.55 -1.98 1.70 -2.57 0.15 0.67 0.71 -1.89 -0.07 -1.29 -3.15 -0.06 0.69 -6.97 -0.03 1.91 7.07 .97 1.42 -6.59 1.58 -0.74 -4.15 0.14 2011 0.57 0.17 Note: "Announcement" refers to the date on which Fuyao announced the amount and payment date of the dividend; "Ex- Dividend" refers to the first date on which holders of record of the stock were not entitled to receive the declared dividend; "Payout" refers to the date on which holders of record received the dividends; "Payout SSE" refers to the Shanghai Stock Exchange 180 Index. Prepare a pro forma cash flow forecast with 0.50 per year dividend by completing the following table. Fuyao Glass Pro Forma Cash Flow Forecast 2015 2018 2016 2017 (millions of ) Cash flows from operating activities Cash generated from operations Income tax paid Net cash generated from or (used in) operating activities Cash flow from investing activities Capital expenditures - Russia Capital expenditures -Others including China Working capital investment Net cash generated from or (used in) investing activities Net cash available before financing (4,335.50) (1,121.57) (949.42) (1,242.42) Cash flow from financing activities Borrowings or (Repayments) Dividends paid to the company's shareholders Other interest received Capital injections - issuance of new shares Net cash generated from or (used in) financing activities 227.00 5.00 61.00 13.00 Net (decrease) or increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period Notes: 1. Cash generated from operations and revenue increase at a constant rate of 10 per cent per year from 2014 to 2018. 2. Income tax paid is 12 per cent of cash generated from operations from 2015 to 2018. 4. Planned capital expenditures for Others including China remains the same amount from 2016 to 2018. 5. Working capital investment increases at a rate of 163 per cent of the change in cash generated from operating activities until 2018. c. Cash Flow Statement millions of 2013 2012 2014 Cash flow from operating activities Cash generated from operations Income tax paid Net cash generated from operating activities 2.772 (346) 2,426 3,199 (382) 2,817 3,565 (435) 3,131 40 311 75 (1,507) (1,881) (2,793) Cash flow from investing activities Proceeds from disposal of PP&E (including leases) Purchases of PP&E (including leases and intellectual property Interest received | Government grants received relating to PP&E Net cash used in investing activities 14 83 (1,383)| 151 (1,417)| 93 (2,612) Cash flows from financing activities Borrowings and repayments Dividends paid to the company's shareholders Interest paid Capital Injections Net cash used in financing activities (380) (801) (197) 14 (1,364)| (186) (1,001) (209) 741 (1,001) (254) 0 (1,396) | (511) Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period (320) 808 487 5 487 492 7 492 499 EXHIBIT 3: CONSOLIDATED FINANCIAL STATEMENTS a. Balance Sheet millions of 2012 2013 2014 ASSETS Non-current assets Property, plant, and equipment Leasehold land and land use rights Intangible assets Investments in joint ventures Long-term receivables Long-term prepaid rental expenses Deferred income tax assets 8,0958 ,671 10,26 | 7,142 7,416 | 8,823 523 780875 244757 104 g 25 9 67 56 113153 130 62 B9 Current assets Inventories Trade and other receivables Derivative financial instruments Restricted cash Cash and cash equivalents Assets of disposal group classified as held-for-sale Total assets 5,0656,012 6,630 1,907 1,8772,169 2,647 3,2453 ,549 0 24 a7 490 499 417 402 13,160 14,683 16,89 | EQUITY Equity attributable to equity holders of the company Share capital* Share premium Other reserves Retained earnings Non-controlling interests Total equity 6,988 7,858 8,814 2,003 2.003 2,003 | 34 A4 184 854 874 3,9474,7275,753 | 4 6,992 1 7,862 8,818 | 4 LIABILITIES Non-current liabilities Borrowings Deferred income tax liabilities Deferred income on government grants .009 B80 g 121 1,244 9 18 63 260 1,622 1,213 74 336 5,160 5,581 1,825 2374 206 259 3,1262.899 6,451 2,795 282 3,336 Current liabilities Trade and other payables Current income tax liabilities Borrowings Derivative financial instruments Current portion of deferred income on government grants Liabilities of disposal group classified as held-for-sale Total liabilities Total equity and liabilities 3 7 1 4 32 22 6, 1696,8228,073 13,160 14,683 16,897 | EXHIBIT 3 (CONTINUED) b. Income Statement millions of Revenue Cost of sales Gross profit Distribution costs and selling expenses Administrative expenses Research and development expenses Other income Other (losses gains -net Operating profit Finance income Finance costs Finance costs-net Share of results of joint ventures 10,247 (6,420) 3,828 (779) (763) (236) 63 (48) 2,065 11,501 (6,831) 4,671 (877) (908) (389) 54 2014 12,928 (7,566) 5.363 (982) (1,031) (518) 46 (43) 2,834 2,552 2 1241 (226) (224) 22 (202) (199) 26 (227) 31 Profit before income tax Income tax expense Profit for the year L 1,862 | (338) 1,524 2,379 (462) 1.917 2,638 (422) 2,217 Earnings per share for profit attributable to equity holders of the company during the year Basic and diluted earnings per share (expressed in per share) Dividends proposed 0.76 1,001 0.96 1,001 1.11 n.a. EXHIBIT 4: FINANCIAL PERFORMANCE MEASURES 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 9,689 2,911 12,928 2,217 10,247 1,525 5,717 246 1,513 392 11,501 1,917 14,683 40.61 8,508 1,788 10,567 40.42 6,079 1,118 9,051 42.05 5,166 917 9,462 36.18 3,935 614 7,594 34.76 16,891 13,160 12,212 9,333 41.48 37.35 36.56 31.32 30.51 16.66 4.30 13.46 a. Fuyao Glass Historical Performance Revenue (millions of ) Net Income | (millions of ) Total Assets (millions of ) Gross Margin Percentage (%) Net Income Margin Percentage (%) Dividend Payout Ratio Dividend Yield Ratio Return on Assets (%) Return on Equity (%) Sustainable Growth Rate (%) Current Ratio Debt Ratio Capitalization Ratio 0.52 17.15 n.a. na. 13.12 14.88 0.66 0.06 11.58 21.86 15.61 0.53 0.05 0.06 21.01 0.64 0.04 16.92 30.60 18.39| 0.30 0.01 12.35 25.49 0.00 2.64 17.76 15.60 0.54 0.51 0.02 0.01 9.69 18.08 26.01 21.07 0.00 5.98 12.39 13.05 24.38 25.14 24.27 7.53 17.73 n.a. 11.70 7.43 11.41 11.01 17.84 7.53 11.96 10.32 17.73 L 1.03 0.48 0.34 1.08 0.46 0.33 0.98 0.47 0.36 1.04 0.49 na 1.00 0.45 na 0.99 0.52 na 0.78 0.65 na 0.88 0.63 na 0.94 0.62 na 0.92 0.66 na. NSG Gobain b. Competitive Performance Revenue (millions of ) Net Income (millions of ) Total Assets (millions of ) Gross Margin (%) Net Income Margin (%) Dividend Payout Ratio Dividend Yield Ratio Return on Assets (%) Return on Equity (%) Sustainable Growth Rate (%) Current Ratio Debt Ratio Capitalization Ratio Fuyao 12,928 2,217 16,891 41.48 17.15 n.a. n.a. 13.12 25.14 n.a. 1.03 0.48 0.34 For Year Ended December 31, 2014 Saint- AGC Xinyi 67,415 30,305 279,167 18,689 1,024 (824) 6,480 1,092 103,867 46,259 3 04,667 16,827 24.61 24.13 6 .81 25.17 1.52 (0.03) 2.32 12.57 1.31 0.00 0.73 0.43 0.037 0.00 0.03 0.01 0.991 (1.78) 2.13 6.49 1.73 (9.45) 5.17 8.85 (0.53) (9.45) 1.40 5.04 1.76 1.03 1.35 1.00 0.43 0.81 0.59 0.41 0.33 0.72 0.40 0.33 EXHIBIT 5: PLANNED CAPITAL EXPENDITURES, 2015 AND 2016 Location and Type of Expenditure Year ended December 31, 2015 2016 (millions of \) 760 250 1,010 255 455 710 32 0 1 United States Auto glass Float glass U.S. subtotal Russia Auto glass Float glass Russia subtotal Others Auto glass in Shenyang Auto-glass technology upgrades Float-glass technology upgrades Other Others subtotal Total 470 525 995 32 190 1,400 200 158 200 100 1,300 3,005 1,948 2,990 EXHIBIT 6: BORROWINGS (MILLIONS OF ) As of January Debt Type As of December 31 31 2012 2013 2014 | 2015 Non-Current | Long-term bank borrowings | Medium-term notes | Less: current portion of non- current borrowings Subtotal 617.0 399.5 (136.3) 880.2 924.0 399.5| (406.0) 917.5 1,198.0 399.6 (385.0) 1,212.6 1,198.6 399.7 | (385.0) 1,213.3 2,687.3 311.3 Current | Short-term bank borrowings Short-term commercial papers Current portion of non-current borrowings Subtotal | Total 1,146.4 | 1,260.6 | 2,640.9 1,843,1 1,232.7 309.7 136.3| 406.0 385.0 3,125,8 2,899.3 3,335.6 | 4,006.0 | 3,816.8 4,548.2 385.0 3,383.6 | 4,596.9 | Note: Fuyao's principal banking relationships were with Agricultural Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Bank of China, China Construction Bank, The Export-Import Bank of China, Citibank, and Deutsche Bank. EXHIBIT 7: STOCK PRICES AND DIVIDEND PAYOUTS a. Stock Price Change around Dividend Payment Year Dividen d RMB Event Date 3-Day SSE Return (%) Fuyao minus SSE (%) Fuyao Ending Share Price (W) 8.08 8.59 8.00 3-Day Fuyao Return (%) 1.25 -5.93 0.00 -0.84 1.81 -7.74 2014 0.50 -3.49 3.49 2013 0.50 2012 0.40 Pavout May 19, 2014 Ex-Dividend May 13, 2014 February 25, Announcement 2014 Payout June 7, 2013 Ex-Dividend June 3, 2013 Announcement March 19, 2013 Payout July 6, 2012 Ex-Dividend June 27, 2012 Announcement April 25, 2012 Payout April 8, 2011 Ex-Dividend March 30, 2011 Announcement March 2, 2011 Pavout April 29, 2010 Ex-Dividend April 20, 2010 Announcement | March 10, 2010 8.10 9.00 8.42 7.60 8.40 8.28 12.16 12.95 12.59 11.11 11.82 12.45 -4.86 -8.94 1.66 -0.66 -6.92 2.64 2.13 -8.48 1.50 -2.03 -7.30 0.08 -5.55 -1.98 1.70 -2.57 0.15 0.67 0.71 -1.89 -0.07 -1.29 -3.15 -0.06 0.69 -6.97 -0.03 1.91 7.07 .97 1.42 -6.59 1.58 -0.74 -4.15 0.14 2011 0.57 0.17 Note: "Announcement" refers to the date on which Fuyao announced the amount and payment date of the dividend; "Ex- Dividend" refers to the first date on which holders of record of the stock were not entitled to receive the declared dividend; "Payout" refers to the date on which holders of record received the dividends; "Payout SSE" refers to the Shanghai Stock Exchange 180 Index